FPA New Income: Decline In Mortgage Debt Eclipsed By Increase In Other Types Of Consumer Credit

Ryan: Good afternoon, and thank you for joining us today. We would like to welcome you to the FPA New Income 3rd Quarter 2013 Webcast. My name is Ryan Leggio, and I’m a Vice President here at FPA. The audio, transcript, and visual replay of today’s webcast will be made available on our website, fpafunds.com.

Since its inception in 1984, the goal of FPA New Income Incorporated and managed accounts under the FPA Absolute Fixed Income Strategy has been one of generating current income and long-term total return. We strive to produce a positive absolute return every calendar year. And to achieve this, the team employs a total return strategy that invests in fixed income opportunities with a focus on income, appreciation, and capital preservation. Market opportunity will dictate investments across these three areas.

We are proud to have been able to achieve this goal and that we have earned a positive absolute return in each calendar year with considerably less portfolio volatility than the market since the inception of the Strategy. We hope to continue this positive trend.

It is my pleasure to introduce Tom Atteberry, a partner at FPA who joined the firm in 1997. Tom has been manager of FPA Absolute Fixed Income’s separate account since 2002, and co-manager of FPA New Income Incorporated since 2004 and sole manager since 2010. And joining Tom today on the call from the investment team are analysts Julian Mann, Melinda Newman, Abhi Patwardhan, and Naz Pajoom.

Before I hand it over to Tom, what you see on the screen right now are some key attributes for the Strategy, and I’d like to point everyone’s attention to the table on the bottom of the screen. What you’ll see is the FPA New Income Strategy has comparable yield to worst as the Barclays U.S. Aggregate Bond Index, which is the Fund’s primary benchmark, and yet is taking on significantly less interest rate risk as measured by effective duration.

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